Failed House Hack!
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $330,000
My now wife and I purchase as a house hack. This property is where I learned the value of a great agent, and what ultimately inspired me to get my license. We'll just say...I trusted my agent and overpaid. Plenty of lessons learned, and I am still learning. We lived in it for a couple of years and it now serves purely as a rental.
What made you interested in investing in this type of deal?
I always loved the idea of house hacking! My girlfriend (now wife) didn't want roommates. This home had a bedroom that could be turned into its own studio apartment so we did just that.
How did you find this deal and how did you negotiate it?
We used a local realtor. Unfortunately, this property was unique and the comps told a different story. My gut told me to buy at a much lower price, but I trusted my realtor (no hard feelings, she was looking at what the market was telling her.) In hindsight, I should have trusted my gut and negotiated a much lower purchase price.
How did you finance this deal?
0% down VA loan.
How did you add value to the deal?
Well, once we found all of the problems with the property (plumbing, foundation, rodent, etc) we went about fixing them! Unfortunately, when you buy too high, those fixes don't get you too far in terms of value.
What was the outcome?
We still own and are in the process of selling. It serves as a rental now. I have paid my tuition in real estate with this property. It is something my wife and I now look back on and laugh. And now when we have problems pop up with our primary, they seem like no problem at all! After all of our work on the home, its a great little property. We just overpaid and I did not trust my gut. Lessons learned!
Lessons learned? Challenges?
Not all agents are savvy with investing. Find one that is when looking to house hack or buy and hold. Overpay for inspections, not property. 0 down loans can be great, as long as you leave enough meat on the bone to sell when the time comes.